Find the best Vancouver mortgage rates
Get the best Vancouver mortgage rates, all in one place.
Current mortgage rates in Vancouver
Comparing mortgage rates in Vancouver
Vancouver is the third biggest city in Western Canada and Canada's eighth largest city by population. It is known for its cultural diversity and vibrant economy. However, this popularity comes at a cost - the housing market in Vancouver is highly competitive, with average property prices reaching $1.2 million as of September 2024, according to the British Columbia Real Estate Association.
The Metro Vancouver area has over 686,000 residents, out of a total population of approximately 5.5 million across British Columbia as of 2024. As one of the most densely populated cities in Canada, Vancouver's housing market is the second largest in the country, following only Toronto, thanks to the population and presence of all major banks, credit unions and other lenders.
Given these high prices and population, securing a competitive mortgage rate in Vancouver is critical for prospective homebuyers. With a strong presence of banks and lenders vying for mortgage buyers is evident from the rates available in the market. Bank of Canada’s 1% rate cut so far this year has increased the flow of buyers entering the market. Factors like your down payment, credit score, income-to-debt ratio and other factors will all influence which mortgage is best for you.
How to get the best mortgage rate in Vancouver
Getting the best mortgage rate in Vancouver’s competitive housing market is based on multiple factors including thorough research, a good credit score, and securing a substantial down payment. Here are some tips to help you secure the best mortgage rate in Vancouver:
- Improve your credit score: Given Vancouver’s high property values, lenders are likely to be stringent about credit requirements. If you aim for a 700+ credit score, you are likely to qualify for a better rate. Improve your debt service ratio, income, reduce credit card debt and other loans, to qualify for a larger mortgage.
- Save for a 20% or more down payment: In Vancouver’s expensive housing market, saving for a 20% or more down payment on an average home means saving over $240,000. While this is a substantial amount, saving a 20% down payment can help you avoid paying mortgage insurance and is likely to qualify you for a better rate.
- Comparison shop: With the presence of 6 major banks, credit unions like Vancity and Coast Capital, and other alternative lenders, comparing rates from a couple of different lenders can result in significant savings. No two lenders will offer you the same rate, so it is best to compare rates before you finally decide on one.
- Get mortgage pre-approval: You can save yourself from last minute rate surprises by getting a pre-approval based on your financial situation. Vancouver’s fast-moving market means properties often receive multiple offers. Having a pre-approval allows you a critical advantage when making offers and helps you understand your budget.
- Consider different mortgage types: Consider both fixed and variable rates carefully. Variable rates have historically offered savings, but in a situation where rates are expected to increase, buyers prefer opting for fixed rates. Read the mortgage market thoroughly before taking the leap. Also consider features like rate portability, pre-payment options when signing up a lender.
- Negotiation terms: While some Vancouver mortgage lenders may be firm on the rates, you can negotiate for terms that suit the local market. This includes having the ability to make lump-sum payments or port your mortgage.
- Check for special programs for homebuyers: Provincial as well as federal governments have special programs for home buyers like:
- First-time home buyers program
- BC home partnership program
- BC speculation and vacancy tax exemption
- Federal first time home buyer incentive - Consider a Vancouver mortgage broker: Local knowledge can be immensely useful in a unique market like that of Vancouver. A local mortgage broker can help you understand local market conditions affecting rates, BC-specific regulations and programs, which lenders are favourable for different Vancouver property types.
It is important to note that Vancouver’s housing market has its own unique characteristics, including high price range, substantial foreign investment influence and provincial regulations. Working with professionals who are in the know-how of the market can help you understand the nuances better and help you secure a better rate.
City of Vancouver’s closing costs
In Canada, closing on a property comes with its own set of expenses. As a homebuyer you are expected to set aside a budget that will cater to several closing costs beyond the property purchase price. Here’s a list of closing costs you can expect to meet in your home buyer journey in Vancouver:
- 1.
Property transfer tax or land transfer tax: When buying a property, you will have to pay a property transfer tax to the provincial government and, in some areas, the municipality too. The value of your property will determine the tax rate you will be subject to in your province. Some provinces might have marginal land transfer tax rates, with a higher tax rate the higher the purchase price. In Vancouver, you have to pay 1% tax on the first $200,000 of the property price, 2% on the portion between $200,000 and $2 million, 3% on the portion between $2 million and $3 million and 5% on any portion above $3 million.
- 2.
Foreign buyer tax or non-resident speculation tax: An additional 20% foreign buyers tax may apply on your home purchase in Vancouver if you are not a Canadian or permanent resident.
- 3.
Legal fees: A lawyer will be required to preside over your house closing and to vet all the legal home-related documents. For this service, lawyers charge a legal fee, which generally ranges from $900 to $1,500.
- 4.
Title insurance: Additional charges such as title insurance ($200-$400) and registration fees ($70-$200) may apply to your purchase. Title insurance safeguards homeowners from disputes over property ownership or issues related to the title of their home.
- 5.
Mortgage insurance premium costs: If you decide to go with a 5% to less than 20% down payment, you will have to pay a premium on mortgage insurance (like CMHC insurance). This may vary from 2.8% to 4% depending upon the cost of your property (under $1.5 million).
- 6.
Appraisal fee: Your lender will send an office to appraise your property, for which they charge a fee. This appraisal fee could range from anywhere between $300-$500 and will help secure your mortgage with the lender.
- 7.
Home inspection: A home inspection fee is calculated depending upon the size of the property and type of property. This cost could range from $400 to $700.
- 8.
GST on new property: New construction homes in Vancouver have a 5% GST charge, though the province may provide rebates for primary residences costing under $350,000 and some partial rebates as well.
- 9.
Empty Homes Tax or Vacancy Tax: Vancouver homeowners, who purchase a second or investment property, are required to submit a declaration each year to determine if their property is subject to the Empty Homes Tax. Properties deemed or declared empty are subject to a tax of 3% of the property’s assessed taxable value. This has been implemented to ensure housing affordability and to address rental issues in the city.
Rebates for Vancouver’s first-time home buyers
- 1.
First-time home buyers' program: The first-time home buyers' program eliminates the property transfer tax you pay when you purchase your first home. If you qualify for the program for an eligible property, you may get either a full or partial exemption from the tax. If one or more of the purchasers do not qualify, only the percentage of interest that the first-time home buyer has in the property is eligible.
- 2.
Newly built home exemption: The newly built home exemption removes property transfer tax on qualifying purchases of a principal residence. Effective April 1, 2024, the fair market value threshold for a full exemption for newly built homes increased $1,100,000 from $750,000 previously. A partial exemption is also available for properties with fair market values just above the threshold. A newly built home includes a house, or a new apartment in a newly built condominium building.
- 3.
Purpose-built rental exemptions: If you’re purchasing a new qualifying purpose-built rental building on or after January 1, 2024, you may qualify for the purpose-built rental exemption from the further 2% property transfer tax on the amount of the residential property value that exceeds $3,000,000.
- 4.
First Home Savings Account (FHSA): The FHSA is a registered account that could allow you to save for your first home with tax advantages. Contributions are generally tax deductible and withdrawals from the account for the purpose of buying or building a qualifying home is tax-free.
- 5.
Home Buyers Plan (HBP): The HBP allows you to withdraw up to $35,000 from your RRSP to buy or build a primary residence. The withdrawal is tax free if paid back within the required timeframe.
- 6.
FTHB Tax Credit: First-Time Home Buyer’s Tax Credit allows first-time home buyers to claim a non-refundable tax credit of up to $1,500.
Vancouver Empty Homes Tax
In a bid to address the housing affordability and availability issues plaguing the BC rental housing market, in 2017 the city council devised this punishment tax for homeowners who were leaving their non-primary residences off the rental market. The main purpose behind this tax was to return empty or under-utilized properties to use as long-term rental homes for people who live and work in Vancouver. The city has one of the lowest rental vacancy rates in Canada. This situation causes an imbalance between demand and supply of rental units and puts pressure on rents, availability and affordability issues for renters.
Vancouver homeowners are required to submit a property status declaration every year to determine if their property is subject to the Empty Homes Tax or Vacancy Tax. The properties that are deemed or declared empty will then be subject to 3% of the property’s assessed taxable value for being kept empty.
If any homeowner fails to make property status declaration by the city council set due date, it leads to a $250 by-law ticket. Starting 2023, if someone missed the late declaration deadline, a penalty of 5% of the vacancy tax levy is charged. If any homeowner makes false property status declarations, that may lead to a penalty of up to $10,000 per day of the continuing offense, in addition to payment of the tax.
As a result of this tax, 52% of properties declared, deemed or determined vacant in 2021 were converted to occupied in 2022. There has been a 17% reduction in vacant properties between 2021 and 2022. Besides, the city has reported $142 million of tax revenue which has been allocated to supporting affordable housing initiatives between 2017 and 2022.
Frequently asked questions about Vancouver mortgage rates
Still have more questions about Vancouver mortgage rates? Don’t worry, we got them answered.
Shivani Kaul is a seasoned freelance writer and editor specializing in insurance, mortgage, and finance.
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